Special T/E School Board Plays to a Full House . . . School Board Members Divided in Budget Approach

The T/E School Board held a special meeting last night.  Because I was at the Board of Supervisors meeting, I once again turn to my friend Ray Clarke to offer his notes from the meeting.  It is interesting to note that the school board members are seemingly divided in their approach going forward (read Ray’s comments below).  Under the category of school director approaches to the budget, it’s interesting to note the differences among the directors as to how to approach the deficit.  Apparently there was standing room only at the meeting, so I encourage others to weigh in and add to Ray’s comments.

Notes from Ray Clarke:

The School Board did a nice job publicizing Monday’s Special Meeting, so the room was packed – although I understand many had to be first redirected from the Tredyffrin township building!  Only one meaningful item on the Agenda, of course: whether to publish a preliminary budget that includes a 4.2% property tax increase, of which 2.8% would come from “Exceptions” that the State has to approve.  

The motion to publish such a budget and to authorize the administration to take the necessary steps to apply for the Exceptions was approved 5:4.

The financials presented were those from the December Finance Committee.  Notable observations: 

  • The absence of the much maligned Federal stimulus will cost the district $1 million next year.
  • The budget deficit with the 4.2% tax increase would be $5.2 million, before any further expense control strategies.
  • There was NOTHING useful from bond counsel to assess the optimum fund balance level.  How much money has he made off T/E.
  • The T/E average tax bill is right in the midst of Chester County comparables.

There was much public commentary before the Board discussion, breaking down along predictable lines that we have seen on CM.  Maintain quality at all costs versus no tax increase at all costs.  My attention was caught by the wife of a local doctor who spoke vividly about the economic conditions of her husband’s patients.  And, although his income is down, he makes the sacrifices necessary to maintain quality.  Not all TESD constituencies are at that point.  

Others who spend a lot of time in the schools commended the school programs and wanted no reductions (although that was not the issue on the table); perhaps a large reason that the quality is high is that many parents spend a lot of time in the schools. There was much talk that it was OK to raise property taxes because they are not as high as Radnor and Lower Merion, but perhaps when taxes rise to those levels there will be less for mortgage payments. 

It was interesting that Tom Colman resurfaced, citing his history of work with both TESD and TT that resulted in one year tax freezes.  He would now go along with higher taxes, but he did not report on the survey in his BAWG report that favored income taxes over increased property taxes by a factor of 2:1.

So, it came to the board vote.  There were four camps:

  1. Keep the options open: Cruickshank, Fadem, Buraks.  No discussion of why it’s OK to keep the property tax increase open, but not the income tax voted down with no analysis just a couple of months ago.  One good point from Buraks (who would not necessarily accept any exceptions if they turn out to be available): the expense side of the budget is still very fluid.
  2. Only tax beyond the Index if approved by referendum: Brake, Bookstaber  The latter relying heavily on the Colman perspective.  Dr Brake highlighted the property tax increase water torture (my term): an average increase of $191 next year (just 50 cents a day!) seems small – but that’s a cumulative total of $938/year over the last 6 years.
  3. Tax at the Index, control what expenses we can this year, draw down the Fund Balance:  Mahoney.  That forces attention on the unsustainable long-term structure next year, when the next contract will be negotiated, expense options studied further and other revenue options analyzed.
  4. Unexplained: Bruce (No exceptions), Motel, Crowley (Apply for Exceptions).

Hopefully others at the meeting can supplement my perspective. So, onward with an estimated 13 meetings before final budget and tax approval.  Many opportunities to make your voice heard, starting with the January 10th Finance Committee.  

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  1. The results of the BAWG survey did not indicate that favored income taxes over increased property taxes by a factor of 2:1. It showed that 20% of respondents agreed/strongly agreed with the imposition of a EIT while 10% of respondents agreed/strongly agreed with increased property taxes. The question was not a choice between the two, 92% agreed/strongly agreed with reducing expenses.

    The BAWG survey was not a scientfic study with appropriate random sampling. The message from the taxpayers was to reduce expenses, not enact an EIT.

  2. Thank you, Ray, for your notes on last night’s special SB meeting. I also attended with perhaps a different expectation, and was not disappointed.

    I believe that five SB members courageously voted in the best interests of the disrtrict’s children by voting to seek exceptions last night.

    Perhaps it is a matter of trust. I was impressed with the Board’s hard work on the 2010-11 budget, their successful collaboration with the Administration, and the results they achieved. Thus I trust that they will work just as hard to achieve all possible cost savings in this year’s budget.. However, I agree they need the flexibility to raise taxes above the Act 1 limit if needed to maintain the educational quality of T/E education.

    The challenges faced by the district this year are more daunting than ever before::

    – a $4MM increase in salary expense over 2010-11, with no way to renegotiate or reduce workforce for economic reasons
    – $1.4MM increase in healthcare and prescription plan costs – even though the district switched to a less expensive self-insurance plan last year
    – A $1MM net increase in the district’s PSERS contribution
    PLUS
    – a decline in property tax revenue due to lowered assessments and reduced transfer taxes
    – the end of federal stimulus funds ($626K last year)
    – an $400K reduction in state aid

    Even with the largest possible tax increase next year, it will provide an additional $3.6 MM in revenue, leaving the District with a projected $5.1 MM deficit to be addressed through cuts and fund balance.

    According to BAWG chair,Tom Colman, the district cannot cover the anticipated deficit with Act 1 revenue this year. And he should know.He led a group that examined TESD’s cost structure several years ago.. In his view, the district is “really well managed.”. and has given taxpyers good value for their dollar.

    To the perennial anti-tax crowd, Tom reminds them that when we invest in our schools we are investing in our kids and the value of our homes.

    If the state does approve both exceptions and the SB feels it necessary to approve the full 4.2% increase ( 1.4% for Act 1 plus the 2.8% for exceptions in the final budget), the average homeowner will pay an additional $191.

    That would make the averageT/E tax bill $4,730 – . compared to an average Chester County property tax bill of $4,334.

    Despite what some would have you believe, we are not living large in this school district. Our tax dollars have been well managed. Our schools are top notch.

    I support keeping it that way!

  3. 1.4 million in prescription and health care costs even though switched to a less expensive health care plan last year. This is disgusting. PSER’s ? Maybe the anti tax crowd would be more amenable to a slight tax increase but there are some things in here that are just philosophically hard to swallow. What happened to health care reform?

  4. There is nothing wrong with raising taxes to support government services that voters want and are willing to pay for. But the majority of TE voters may not want the additional property tax increases. From the comments last night, it is clear that there is anger over what voters perceive to be fat in the budget.

    In light of voter disapproval and anger over what the voters (correctly or incorrectly) believe to be waste in the budget, it may be a risky move for those board members who voted for the tax increase. However, I agree with Kate that our schools are top notch and that (in comparison to other districts) our school board has done an excellent job managing tax dollars.

    While I understand and appreciate the reasoning behind Fadem, Buraks and Cruickshank’s votes, I think that the board missed a strategic opportunity last night by voting for the exceptions. (It would have been interesting to hear Motel, Bruce and Crowley provide their comments about why they chose to vote they way they did. The other board members provided insight into their decisions. Whether you agree or disagree with them, it’s still nice to know where they are coming from and why they voted the way they did.)

    Regarding that missed strategic opportunity, Kevin Mahoney was correct in saying that the board has the ability to balance the budget without program cuts using the fund balance (e.g. taxpayer money) as a rainy day fund, the Act 1 increase of 1.4%, and program cuts that have been identified as “low impact.” This gives the board time to negotiate a new union contract and to see if our local economy recovers– including the all important transfer taxes.

    I believe the board would be in a better position prior to the union negotiations had they voted down the exceptions and gone to referendum. Did it ever occur to anyone that a voter referendum in May 2011 would be a wonderful way to show the union prior to the negotiations exactly how the public would feel about another contract that includes raises of 7%+ a year (that’s the number we heard at the meeting last night)?
    If the referendum failed, the board could dip into the fund balance for next year without harming the educational program.

    Or if it passed, it’s a clear sign that the voters agree with Kate and Tom Colman that the district needed the money and is doing a good job with the budget. Either outcome would be a victory for the district and the board.

    A referendum is a good way to raise community awareness about TE’s financial situation. Referendums built consensus for government decisions and are a valid way of deciding local issues.

    There is a lot of logic behind going to the voters on this issue, so I don’t think it’s fair to cast it as a politically-easy move since it would actually anger many of the parents who came to that meeting asking the board to vote for higher taxes. (Many of these parents believe the referendum would fail, and they don’t want to risk not having the tax increases pass.)

    If you want to set up the district for contract negotiations, spending down the fund balance and setting a trend of accepting only the Act 1 increase would be extremely valuable. As Ray Clark points out, our taxes keep going up every year. $180 here or there isn’t a lot, but it is when you keep seeing these increases every single year. Ray has written numerous times about how the continued rise of property taxes is hurting those on fixed incomes. It is an unsustainable rate of tax growth caused by union contracts, pension costs, healthcare and benefits. At some point, we need to get these costs under control, and that requires some belt tightening and a show of strength prior to union negotiations.

    This isn’t an easy issue, and the split vote shows this. Remember the days when the board always voted the same way? We have a thoughtful group of board members and many involved citizens. Certainly we can find a way to resolve these issues and to continue the transparent budget process we had last year.

  5. Additional perspective, you hit it on the head. We cannot afford a 7 percent increase the union is asking for. It is unsustainable. No, this is not union bashing, just reality. A referendum would be a good way to demonstrate to the union, one way or another where the voters are on this matter. Tax increases of 180 bucks a year for one year isn’t alot, I agree, but year over year they do add up and even if the public at large was to agree to this, what does the union offer to help? probably a strike threat. I think there are alot of unemployed teachers out there that would fill in. Yep, scabs. We need good negotiators.

  6. There’s no money pit that comes along with homes in Tredyffrin (or anywhere else) from which these inexorable property tax increases can be paid. But taxpayers’ money is sitting idle in the Fund Balance and is being diverted to other Municipalities. Maybe it’s time to tap those resources?

    The decision is not to increase property taxes or the quality of education will suffer and the price of our houses will go down. The challenge is to manage available resources smartly so that the education we deliver is good value and the price of our house stays up.

    And while it may be true that the budget gap can not be closed in 2011/12, let’s start thinking outside the box for 2012/13. On the revenue side, there’s that EIT money going to other jurisdictions. On the expense side there’s a new union contract to consider. Remember that the unions have not flexed at all, so the adjustment will have to come all at once.

    In the last three (three!) years, the salary of a mid-level teacher moving on the matrix from 6 years/M+15 to 9 years/M+30 has increased forty (forty!) percent. The cost of benefits has increased that much or more. It was mentioned at Monday’s meeting that studies have shown no correlation between teacher performance and education/certification level. The matrix is an anachronism.

    So what happens to that budget projection model when we plug in a completely revised salary structure that shares benefits costs and adjusts total compensation down by, say, 15%? When we make it clear to all third party providers of educational services that we have the same expectation of their fees? When we outsource custodial services? When we foster competition for third party provided busing services? When we challenge administration to lower its cost?

    Finally, an important item in the small print of Monday’s notes that I mis-reported: the request for Exceptions does not actually go to the state until AFTER the Board has adopted the preliminary budget on January 24th. (The vote on Monday was to publish the budget). So, it’s still possible for the Board to adopt a resolution that taxes will not be raised above the Act 1 index.

    1. Well put Ray! You are right to say, “The decision is not to increase property taxes or the quality of education will suffer and the price of our houses will go down.”

      Unfortunately, the parents speaking at the meeting asking for additional taxes viewed the decision to increase taxes as essential to school quality. It is just not true.

      The people at the meeting opposing the tax increase don’t want to harm the educational program, but they do want the district to show some fiscal discipline– especially when it comes to union negotiations and administrative costs. It just isn’t true to say that board members who oppose the tax increase want to cut the educational program and harm the district’s quality. I’m convinced all the board members want to keep the district high quality, but some of them are just taking a harder line on expense increases. Bookstabber for example voted against the tax increase above Act

      1. (sorry…I hit reply too quickly on my comment.)

        I was noting that Bookstabber voted against the tax increase above Act 1, but said she would consider voting for the increase as a private citizen in a referendum since she’s a parent who would have kids in the schools. It’s easy to see why parents, including board members, would want the increases since they will have kids in the schools themselves.

        It’s an interesting thing to consider at election time. Would candidates with kids in the schools be more likely to support tax increases and/or to preserve the educational program? Nearly all of the people at the meeting who spoke in favor of tax increases had kids in the schools. Those opposed were either retired or didn’t have kids in public schools.

        On the board, Bruce, Mahoney, Brake and Bookstabber don’t have kids in the schools, and they all voted against the increase. Buraks, Cruickshank and Motel do have kids in the schools, and they voted for the increase. I believe Fadem’s children recently graduated, but I’m not sure about Crowley one way or the other. Bookstabber isn’t running for reelection according to the rumor mill because she’s pregnant again, but I wonder if her votes would change once her children were in the schools as it certainly impacts the other board members when they vote.

        I’m not passing any judgment on the board on this issue. It’s just an interesting thing to see how having children in the schools may impact the way board members vote because it clearly influenced the perspective of the public comment during the meeting.

        Thoughts? How important should having kids in the schools be when picking a board member? Do you think parents are more likely to support tax increases? And is this a strong argument in favor of the EIT (parents are more likely to pay an EIT and more likely to favor paying higher taxes than retired people)? Ray- what do you think?

        1. I have no special insights on Board composition, but inevitably people will look at issues through the lens of their own experience.

          You’d think that people with children in the school are most likely to be motivated to devote the time and energy required. Also, as we’ve seen, for example, in comments from Christine here on CM, it’s very good to have a direct and unfiltered look at what’s really going on inside the schools.

          I suppose that voters would be best served by looking for diversity when they consider candidates’ qualifications. Fundamental capabilities clearly need to include a commitment to education and the wherewithal to provide governance for a $100 million/year enterprise.

  7. Each SB member who voted to apply to the state for exceptions under Act 1 emphasized their hope and intention to limit the size of any tax increase – with the goal of cutting costs wherever possible while maintaining educational quality. Given the current challenges faced in THIS COMING YEAR, they believed some flexibility was necessary. I trust their assessment and support their decision.

    That’s not to say that Mr. Mahoney’s preference to use a substantial amount of fund balance (taxpayer money) has no merit. It is an option worthy of serious consideration and may yet be the preference of the Board.

    Unfortunately, the public did not receive an answer to a resident’s inquiry at Monday’s meeting : how low can the fund balance go before our bond rating is negatively affected? An important consideration to which we deserve n answer.

    As stewards of this money, some Board members rightly worry about the longer-term consequences of drawing down too much when the future of state funding and the district’s PSERS obligations are not certain. In their minds it would be irresponsible to risk
    draining this rainy day fund by too much.

    Last year’s painful budget-cutting process revealed the stark choices that lie ahead. The fat has already been cut. The opportunity to negotiate a realistic teacher’s contract that reins in salary increases and asks teachers to contribute more to their healthcare costs will not be provide relief until 2012-13…

    Ray mentions the teachers’ current annualized salary increase – a raise of 5.2% plus a 2.1% increase based on the average teacher’s movement on the salary matrx. It is certainly out of line with what the majority of taxpayers in the district received in the private sector over the last two years. We may envy their good fortune-job security and raises at a time when many families in T/E have not been so lucky, and seniors on fixed incomes are feeling the pinch. This all needs to be taken seriously.

    But if residents of T/E support maintaing the quality of our public schools , then given the continuing erosion of revenue in a bad economy, our School Board is asking for the flexibility to raise taxes above the 1.4% index – this year – if needed.

    This year.

  8. The decision to use fund balance not only just delays the inevitable tax increase — it adds to the ultimate increase required.. Any dollar that is used as a one-time fix is in effect raising the spending without taxing the public. Yes — the fund balance is the taxpayer’s money, but as with the $300K “one time” savings last year, and the federal stimulus money — it gets spent and adds to the cost of operating the district, and then next year we have to not only replace what we spent “one time” but also tax for any increases.
    I do not know the ins and outs of the salaries in our district, but I have read here and elsewhere that you cannot reduce compensation under the PA constitution. Even though it is bargained, I do not think there can be any cuts in salary. I went on the PSEA site and read their rules and guidelines about salaries. The statewide goals are very serious and very clear. They also offer teachers interest-free loans while any strike takes place.

    So while a 4% increase sounds high, even it does not come close to funding the gap between revenues and expenditures. If we don’t tax to cover what we spend, we are going to expand our “deficit” by ever larger numbers.
    Does that make sense? Using the fund balance is kind of like using a home equity line of credit. It’s your equity, but you are living on borrowed money – even if you are borrowing it from yourself.
    I would like the board to ask for the exceptions and then do the hard work of looking for program cuts. I think they should absolutely use the fund balance to fund “one time” expenditures (that won’t recur the next year like funding the escrow account for severance payments to administrators), but in doing that, should approach the salary negotiations with a freeze mentality. If the teachers want health care benefits, we should only offer them a fixed contribution — not a fixed plan. We cannot change their pension funding to a defined contribution (from a defined benefit), but we can request/require that they participate in their own benefits. They can choose a cheaper plan and limit the obligation of the taxpayer to pay for their fancy packages.
    I don’t think this is about asking teachers to contribute more to their health care. I think this is about limiting the exposure of taxpayers to ever increasing costs. Let’s ask the board to define the contribution — let the employee define what plan that means they can afford.

  9. Sarah makes a good point that using the fund balance delays the inevitable tax increase. That’s close but I’d modify it to say that using the fund balance delays the inevitable tax increase OR EXPENSE DECREASE.

    The teachers contract due in 2013 is a canard. It will not be part of the solution to closing the $6M (and growing) gap between revenue and expenses. A conservative contract can prevent the yearly gap from getting larger, but it can’t close the gap. Teacher compensation cannot be reduced because of status quo in the labor laws.

    So what are the board members waiting for? Why not bite the bullet? Either make the necessary cuts or go to the public for a tax increase referendum. Some possibilities:

    – it’s human nature to delay difficult decisions
    – it’s fiscally prudent to reduce the fund balance to between 5% and 8% of expenditures ($5M to $8M)
    – there is a negotiations advantage to having the referendum coincide with contract negotiations in 2013

  10. Please tell me how you would propose an expense decrease of any magnitude when you acknowledge that the salaries will NOT go down, and they make up 75%+ of the costs of the district. An “easy” fix is to dump transportation — also not mandated by the state. Of course, you couldn’t get near any of our schools on our two lane roads for about 2 hours a day if there were no busses….but who cares — those parents can just hire someone to drive their kids.

    There are dangers here associated with the composition of people with children vs. people without children. This is not a 55+ community. We have kids here who are entitled to an education.

    If you spend down the fund balance, the realtiy of what Sarah said will play out — you will compound the gap between revenues and expenditures. I would spend down the fund balance to keep the teachers from pointing at it as a nest egg….but not to defer taxing. TAX for what you spend. Cut expenses — but don’t pretend to cut expenses with these “one time” savings…they took out a rather large bond issue last year because the rates were so good…..they had every last dollar in the fund balance and had no need to do that. “But it made sense.” NO it doesn’t. Living off the fund balance IS the same as paying your mortgage with your home equity LOC… If your income (tax revenues) doesn’t equal your expenses of running the district, you are not paying your way.

    NO referendum. If I were on the school board, I would NEVER defer my responsibility to a voting public that on the whole quite honestly isn’t likely to take the time to understand the ramifications of the vote. Yes or No about my money….that’s too easy.

    I pledge allegiance to the flag of the United States of America,
    and to the Republic for which it stands,
    one Nation under God, indivisible, with liberty and justice for all.”

    The REPUBLIC is the key word. The rights of the majority may prevail, but the rights of the minority are protected. FAPE – representative government is well qualified to determine what is appropriate in a public education, and to fund it responsibly.

  11. A few comments for Rest:

    – The budget gap is about 7%. If the board wishes to balance the budget with expenditure cuts they would have to cut the workforce by about 10%. That means a cut of about 45 teachers. That seems high, but Central Bucks operates successfully with a student to teacher ratio of 16:1. Top ranked Unionville operates at 15:1. TE operates less efficiently at 13:1. Cutting 45 teachers would put TE at 15:1. (numbers from the Inquirer)

    – If the board wants to balance the budget with a tax increase they would be required to hold a referendum. They do not have the power, by law, to raise taxes to the necessary level without a referendum.

    – The FAPE (Free and Appropriate Public Education) law applies only to the small percentage of disabled students in the district.

  12. 1. The district cannot cut teachers for economic reasons.
    2. The Student-Teacher ratio is directly influenced by the numbers of students on IEPs….you know — those that you agreeFAPE applies to.

    Didn’t say they could balance the budget with tax increases. Said that the tax increase that would be permitted if Act 1 exceptions are approved would only get them less than half-way there, which is why they need to do it.

    ACT 1 tax limits are very responsible for this issue across the state. There are no powers to negotiate, no legal right to cut jobs, no legal way to reduce salaries, and a population that isn’t willing to get into the details to understand the levels of complexity (that has a majority of non-stake holders – i.e. no kids in the schools).

  13. i think Act 1 eliminated individual boards and communities to think for themselves and make their own decisions. How insensitive and condescending. Or Elite. ???I dont know much of the origin of Act 1 but I bet it had the support of the teachers union.

  14. Not likely….it forces boards to limit tax increases without limiting the power of those who force expense increases.

    1. give it a rest.. thats what I think. It is a conundrum. Where then does the money come from, or how do you cut expenses. It doesnt seem to make sense. Who forces expense increases? Teachers or at least the union. So it really is an untenable situation.

  15. Of course the district can cut teachers for economic reasons. It just has to be called something else. FLES was canceled last year for economic reasons. The teachers that retired last year weren’t replaced for economic reasons. But it was called something else.

    1. No they cannot. They can call it someting else and make cuts — FLES had to be formally requested and documented that it was not meeting district objectives for approval. The teachers that retired were not cut. If we are going to talk about winking about solutions, we are putting a pretty reputable process in jeopardy. Check out successful lawsuits across the region where districts lost back pay and benefits to wrongful termination/cuts.

      1. I agree that the process of teacher reduction has to be honorable and I agree that cuts have to be formally requested and documented that they are not meeting district objectives.

        However, district objectives change based on the economic climate. It would be disingenuous to think the FLES program would have been cut if the district was not in financial difficulty last year. Likewise, all Level 3 personnel cuts will be justified because they are falling short of NEW district objectives.

  16. If you read the budget strategies distributed at the meeting, there are several plans in place to reduce staff through attrition over the next several years. Combine those strategies with a responsible union contract and we are likely to get through the next few years. As the economy improves, transfer taxes will recover and the rate of property tax appeals will slow. These factors will enable the district to close the budget gaps.

    Additionally, the state will need to do something about PSERS because it is bankrupting the other school districts in the state. In comparison to the other districts, TE is in a very good position. TE is not operating in a vacuum. Other districts are being forced to make cuts, and they have higher debt and no fund balance. TE’s quality might decline vs TE in 2007, but TE won’t decline relative to the other school districts. It will remain one of the top districts in the state. Obviously, we would all like TE to stay as good as it was before the economic crisis, but that might not be realistic given the current economic situation.

    Regarding a referendum, don’t voters have a right to decide whether or not to accept tax increases? Shouldn’t voters get to decide whether or not we have too much waste in the school system? How is it irresponsible for school board members to give the public a chance to weigh in on the issue by voting? Don’t we have the right to be heard?

    Electing the board members doesn’t give the public a big enough voice. School board terms are four years, which means that board members are less sensitive to voter opinions when it comes to budget votes than state reps or congressional reps serving 2 year terms. As a result, the best way to determine what the taxpayers really want is to go to a referendum rather than giving 9 people the ability to tax us above the Act 1 cap by applying for the exceptions. The four year terms combined with the fact that our school board elections are not that competitive insulates the members from voter feedback in a way that has led them to make bad decisions in past years on union contracts and other items. Overall, I think our board is doing a good job, but they are not perfect and could be more responsive to voters. There were many more voters at the meeting asking the board to vote against the exceptions than there were asking the board to pass the exceptions, but the board still voted to take the exceptions. If you take that informal survey of voters based on the meeting and also accept the argument that many of the parents arguing in favor of exceptions made that a referendum would fail, then we have a board that feels free to go against voter opinion without fear of losing their elected offices. And aren’t they there to represent the voters? Or are they there just to represent the percentage of people who have kids in the schools? Thoughts?

    1. You said: “Regarding a referendum, don’t voters have a right to decide whether or not to accept tax increases? Shouldn’t voters get to decide whether or not we have too much waste in the school system? How is it irresponsible for school board members to give the public a chance to weigh in on the issue by voting? Don’t we have the right to be heard? ”

      I’ll say again — if I was a school board member, I would not yield the decision to a referendum. Referendums have basically destroyed the educational system in California. And their debts are still out of control. How can you admit that school board elections are not that competitive, and then suggest that the general public has any real understanding of the process?

      The factile statements made about bad contracts reflect a disconnect between what works and what comes out of the process. If I understand it correctly, our school board has negotiated contracts that are less than Radnor or Lower Merion, two neighboring and competing districts. They have not had a strike. Right now, Radnor is in strike territory. How do you think this community would really respond/handle a strike? EVERY SINGLE SCHOOL would be closed. Every single program -probably even including private school transportation — would be shut down. Not forever, but for at least a few weeks or until a settlement. The teachers that live int he district would be in agony — as following their union — which they would do — would be painful and difficult.
      So — we have contracts that are less than neighboring districts and yet we still say that the non-competitive elections (have you ever run? What do you think makes them non-competitive??) has led them to make bad decisions on contracts? Have you read the contract? Have you ever read any other district’s contract?

      So that’s why. The school board serves for free. Even the BOS gets a paycheck, token as it is ($3000?) . They are sworn to “uphold the duties of their office with fidelity”….that means that the facts matter. Voters? How many (obviously aside from the folks posting here) have no interest in facts — just how things affect them personally.

      1. Rest,

        Let’s get our “factile” statements factual.

        LM negotiated their contract in 2005. The last year of their contract (2009-10) called for a 5.0% average raise.

        Radnor negotiated their contract in 2006. The last year of their contract (2009-10) called for a 4.1% average raise.

        TE negotiated their contract in 2008. In 2009-10 the average raise was 5.1% The last year of the TE contract (2011-12) calls for a 5.2% average raise.

        First, TE negotiated the highest increases.

        Second, they negotiated large increases for 4 years knowing they were above any of the historical or then current Act 1 Indexes.

        Third, they negotiated large increases for 4 years right in the middle of the housing crash.

        Thus, the TE contract was not “less than neighboring districts” and it was a bad contract.

        Note: the percentage increases were calculated using the workforce present at the time the contract was settled. The actual budget impact is usually higher due to changes in workforce composition.

        1. So tiresome. It’s like talking to Bill Clinton and trying to prove what the word “is” is….. The increases are not spread, the numbers are examined. If I am a step 5 PhD at LMSD, I made $72,949 in 2009-2010. At TESD that earned me $68,260. The workforce present is the starting matrix, and the subsequent years are projected only. So pardoning my typo in factual (that must make you so proud)…..here are the FACTS….for the final year in the LMSD contract that was in place at the time of the TESD negotiations.

          2009-10 TESD Steps 1-16 Masters only
          Step 1 48,350
          49,800
          51,300
          52,200
          53,650
          55,700
          56,940
          59,100
          61,300
          63,400
          66,000
          69,400
          74,400
          79,850
          86,100
          Step 16 94,900

          2009-2010 LM Masters
          Step 1 51,703
          54,675
          57,819
          61,144
          64,660
          68,378
          72,309
          76,467
          80,864
          85,514
          90,431
          95,630
          Step 13 101,129

          LMSD has only 13 steps, so the last number of their schedule is reached in year 13 of the career. Any subsequent years are at the same amount and change with subsequent salary schedules.

          This is how much each step on the LM Masters Scale is greater than the comparable step on the TESD scale for 16 steps (the additional 3 steps on TESD are compared to the last step on LMSD)

          M
          STEP 1 TESD is 3,353 less than Step 1 LMSD
          4,875
          6,519
          8,944
          11,010
          12,678
          15,369
          17,367
          19,564
          22,114
          24,431
          26,230
          26,729
          21,279
          15,029
          Step 16 TESD is 6,229 than Step 13 at LMSD

          I could get the Radnor numbers if that would help the discussion.

        2. Don’t know how that facile got in there — I was writing a response to Citizenone and thought the world factile was meant to be facile….and apparently hit send :)

          Anyway — here’s my thoughts to CitizenOne — as a former board member:

          CitizenOne
          If you are learning this from one of the negotiators at TESD, then you should rightly take hits at them. At no time in my history of doing these contracts was there ever an average raise or an across the board increase. The numbers were done carefully and working through the total budget increase, with tweaks where we could staying within the guidelines of not reducing status-quo but trying to smooth out the “bumps” that only occur when they use the same number of steps (we added steps to get to 16)but have to expand the range.

          I have immense respect for people who are willing to serve on a school board. I have never said it publicly before, but I have never believed the sitting board understood the salary structure/schedule process well enough to manage it, and if what you are saying it accurate (I had heard they wanted the highest starting salary in Chester County), then you are right to be annoyed.
          John Petersen loves to say previous boards put us in this position, but I assure you that when I did the schedules, the total number was negotiated (and a large amount of health care costs was loaded into that number), and then we distributed the dollars across the salary schedule. Without the matrix, no individual has a clue what the “average raise” is — it can only be a mean. When people are elected to do this job, you are at the mercy of the effort and ability they bring to the table. The board in place is quite intelligent, but none of them asked the previous negotiating team for input. I believe that was a poor decision. I think ego and “we know best” is a dangerous combination in negotiators. If you don’t know where you came from, you have no clue how to go forward. The last contract I was part of was a 6 year contract — the teachers only voted on 3 years of salary info. The final 3 years were based on parameters, so we were able to smooth out many issues and fix what we could. We absolutely limited the district’s exposure to massive salary increases.

          Since I wrote this to post, I see that “rest” has added some specific numbers. The point is well demonstrated — the TESD salary numbers are not particularly competitive based on the M level. Which is why it is clear that their efforts at negotiation did not accomplish much. Because the actual numbers are what teachers look at.

        3. REST,

          I agree that the LM teacher’s contract has fewer steps and higher pay at each step. Maybe Radnor’s contract is similar. My point is that each negotiating team has the ability to make incremental changes to the existing contract – it might be called value added.

          The TE negotiations team “added value”, but not for the taxpayers. They gave away the store (5%+ raises) in the midst of an economic downturn knowing that the raises they promised were in excess of the revenues that could be raised under the Act 1 ceiling.

  17. I am curious about these “exceptions” Are they are rubber stamp when they are applied for? Is it like Obama care “exceptions” where you can get out of the boondoggle? Can we all get out??? Or do you have to be “connected”? Or are only Repubs “connected”?

    Ok sorry, back to Act 1 “exceptions”. Who doles them out? thanks

    1. My understanding is that the Exceptions are expense items outside of routine operations of the School District. The District has to substantiate these costs to the PA Department of Education, which if satisfied, will permit an additional tax increase to cover them. It seems that the expectation is that a valid application will be granted.

      In the present case, the district is considering applying for Exceptions for special education and PSERS expenses. It is noteworthy here that the district has designated over $10 million of the Fund Balance for “PSERS rate stabilization”.

  18. in your explanation of our problem you clearly leave out the geniuses in Harrisburg who have effectively emasculated this board and other boards. Didn’t this board, or the immediate past board lobby against ACT 1?It was stuffed down our throats.

  19. Act 1 has plenty of supporters. The idea is theoretically fine. When Carole Rubley and others were looking for ways to reduce the reliance on property taxes for fixed income, it was one of the outcomes. It was designed to limit the ability of local boards to raise taxes without voter approval and thus to reduce the reliance on property taxes.
    The problem is that the state never gave districts the true ability to control costs — allowing teacher strikes and playing with the pension multiplier, increasing mandates for special education and messing with the PSERS funding variables….all added to the cost of running a local school without any help coming from the state.
    I will agree with CitizenOne that the board that did the current contract clearly didn’t negotiate with any clear goals or understanding of what they were after. If what Andrea says is correct, why didn’t they work with the previous board members who had done contracts to be sure they didn’t go backwards? If it’s so hard to look at the contract and predict the costs, how can citizens protect ourselves?

  20. Here are a couple of facts about the TEEA matrix.

    1. The built-in, inexorable average annual increase for someone with a typical masters and 15 credits is 4.5% per year. Just based on the 2011/12 matrix, status quo, no new contract. Any increase in credits, then further increase in salary. That’s why I suppose that the Radnor union is happy to move right along without a new contract.

    2. Comparing the Radnor and TE salary 2009/10 matrices: averaging all positions has TE ahead by about 1.5%. T/E is generally ahead in the mid-point of experience and at the mid-high end of qualifications – probably where most of the staff are located.

    Does anyone think that these matrices are not compared to one another in order to ratchet all of them up, contract by contract?

  21. Ray,

    Actually, under staus quo the teachers receive no increases in salary – they are frozen in place on the salary matrix. But the costs to the district are not frozen. Benefit costs (PSERS, health care) continue to rise.

    REST,

    I like Act 1. I disagree with your statement that “the state never gave districts the true ability to control costs.” The teacher contract, about 50% of the budget, is under the direct control of the district. The board just has to say no, grit their teeth and endure labor action. As for the large increases in PSERS and health care – that’s what the exceptions are for.

    How can citizens protect themselves? Act 1 gives some protection. But the current board has the ability to obligate future boards and future taxpayers to ante up for teacher contracts and the debt payments for large building projects. I guess the only real protection is capable board members and citizen input at the decision point.

    1. Thanks for the clarification. I was so stunned that something might be set up even slightly in taxpayers’ favor that I took a look at the contract. You’re right – although there is specific mention of the salary moving up one step for every new contract year, there is nothing specified about what happens if no new contract is agreed, so presumably (?) no step movement.

      But since the steps are defined as years of service with the district (with clarifications), any new contract will include that step up, unless the steps are defined differently (years minus one?) or unless the matrix is done away with altogether.

      It’s interesting that I couldn’t find any specific reference to placement of the matrix beyond:
      “Effective July 1, 2008, through the end of the contract the salary of Employees will be determined by placing them on the Salary Schedule as agreed to by Employer and Bargaining Agent as set forth herein.”
      Well, there’s plenty of discussion about placing new employees based on experience and years of service, but not old ones. Did I miss that?

      Here’s another notable clause:
      “Understanding that the demographics of the District will impact the matrix, the parties agree to a joint labor-management committee which will convene in the 4th year of the agreement to discuss possible strategies to keep increment costs down”. Merely lower the rate of increase. It’s a start, maybe. There’s a lot in that contract that requires a very fine-tooth comb.

  22. I am personally disappointed to see that the school board may raise taxes 4.2%. I have kids in the schools and highly value their education, but I also know that families in our school district are still dealing with pay cuts and major increases in contributions to their own health care. I think there is some resentment in the community that the tax payers have to fund the sweet health care benefits and continual raises that the teachers receive. Our family has seen a 20% decrease in our income level over the past few years and we pay 40% of our health care costs. I think that the school board needs to better position itself for the next contract negotiation by cutting expenses and making up for the overly generous contact that they approved during the last negotiations. I say put the question of a tax increase above the Act 1 index to the voters in a referendum and not assume that we all agree that a 4.2% tax increase is the only option.

  23. Since short term strategies are impacted by expectations of the longer term trend, it’s really worthwhile to think about the next contracts. In that context, the comparison with the current NFL situation is interesting this wild card week-end.

    Here are some extracts from a piece in today’s WSJ:
    “Owners made the mistake of signing a bad collective bargaining agreement”
    “player costs outpaced revenue growth”
    “new revenue sources are hard to find”
    “[the owners are] proposing to revise the collective bargaining agreement to shift the pay scale”
    “the owners have to convince players that accepting a pay cut immediately – of 18% …….. – will make them better off in the long term”
    and finally:
    “the union does not seem to be buying what the league is selling”, while:
    “….bankruptcy does not serve anyone very well”

    So it looks like the NFL might “take next season off”. Not something that TESD can contemplate. Hopefully the Board is, though, similarly formulating a very clear idea of its goals, constraints, strategies and communications plan.

  24. JP – regarding your comments on Tom Colman and the “BAWG”, just some factual corrections. I have gone into this elsewere on this blog, so I apoliogize for the repetition, but here goes:

    First, the “BAWG” is the acronym applied to the recent efforts at the township BOS. When Mr. Colman assisted the school district, it was called the “Operations and Opportunities” Committee. It was just what the name implies – looking for opportunities to improve financial efficiency of the operations of the school district.

    Mr. Colman did not serve alone. He used his considerable connections as a high level corporate executive to recruit a team of several corporate people with FINANCIAL and operational expertise. Folks who run or ran large companies.

    The team spent several months interviewing board members, administrators and staff, and reviewing financial and other data supplied by the school district. They were given unprecedented access – they asked for and got budgetary and other documents going back decades. They were given everything they asked for, eventually reviewing many thousands of pages of material.

    They met several times, collectively giving hundreds of hours of their time, all without charge to the district. They produced a report with, if I recall, over 30 recommendations for improving the efficiency of the district. As business people, they were surprised that some of the things they recommended could not be done – as a highly regulated government entity the school district could not – by law – take many of the steps they would have taken in businsess. (one example is reducing teacher staff for economic reasons, as has been pointed out in this blog) Nevertheless, over a couple of years their advice was implemented whenever possible.

    All contracts with all vendors of goods or services were reviewed, and renegotiated or re-bid where savings were possible. Debt was restructured, with bond issues being refinanced to take advantage of better interest rates. Many specific ideas for more cost-effective operations were implemented. As a result, the district today is far more efficient than it was before this effort was initiated.

    The last four years I was on the board, largely as a result of this effort, and as a result of efforts already initiated by the board and administration, we did have a “flat” or 0% year, and other years well below the rate of inflation. As I recall, the four year average, was under 2% when inflation was running 3.5 to 4%.

    Mr. Colman’s committee did result in many millions of savings – at the time I left the board estimated by the administration as at least $10,000,000. That figure is not accurate since some of the savings are ongoing, so by now it is higher.

    The point is that the problem would be much worse now if not for this. That is why there is not a lot of “fat” in the budget left to cut. Further cuts now do potentially impact education because the kind of cuts that could be made without affecting education have already been made.

    The current problems are much larger and involve issues created by the state legislature and the bad economy. The situation now would be worse had we not had the Operartions and Opportunities Committee.

    1. JP – I don’t even know where to begin. So many misconceptions. I’ll just touch on a few.

      First, no school board member served on the Operations and Opportunities Committee. You clearly do not understand what it was and you did not carefully read my description of it (above).

      I capitalized financial because you said Tom Colman is not a financial expert. I think you are quite wrong on that point, and in any case, his committee did include people who deal with finances of large corporations.

      You confuse a lot of separate issues and lump them together. For example, I don’t believe switching from defined benefits plan was one of its recommendations – you are confusing the BOS BAWG with the school district. In the case of the school district, switching to a 401k type plan is not an option since the district is mandated to participate in the state run PESERS pension system.

      As for GOP (and DEMS too?) union contributions – yes that is part of the problem in Harrisburg. Why do you think the legislature does things like increasing the PSERS benefit multiplier without any way to pay for it?

      Speaking of Act 1(tax shifting) and the EIT, you again (for the umpteenth time) confuse the Act 1 process with a revenue producing Act 511 EIT which was not on the table and could not have legally been on the table during the Act 1 period. Act 1 only provided for an EIT or PIT soley to shift money from the property tax to the income tax and would not have produced one red cent of additional revenue for the district. The Tax Study Commission was created under Act 1 and was authorized to evaluate the tax-shifitng EIT or PIT under Act 1 only.

      I could go on . . . . but let me point out one more thing and the I will “stop” as you requested. The Operations and Opportunites Committee was way, way, way before Act 1, before the PSERS pension crisis, and the crash in the economy and housing market was years away and unforseeable at that time. It really has nothing to do with the current crisis as you stated, except the current budget deficit would be bigger had we not had the Operaions and Opportunites Committee.

    2. John — I would like to say once and for all that not only am I sick of your crap, but I am not “chiming in” to rehabilitate my time on the board. I have never met you — which means in my 11 years of going to meetings, you apparently were either not there or had nothing to say. Apathy?

      It’s very easy to sit in the peanut gallery and take pot shots at folks who tried. You were appointed once presumably to firm up your candidacy — and it didn’t work. How are your comments here different from the woman who yelled from the gallery about Obama’s birthplace? WHAT exactly does your rancor contribute to the discussion. Second guessing Tom Colman’s contribution? WHY?

      Folks are claiming that the stuff in AZ is because of the inflammatory rhetoric people like you live by. His classmates and a teacher say they were afraid of the kid. The guy was a loose cannon, but given your continued bashing of contributions, your criticism of almost anything conciliatory, and your determined self-aggrandizement about your own education, just how are we supposed to be comfortable that you aren’t the next dangerous resident? Seriously — how can we tell the good guys from the bad guys if not from their interest in working together?

      You closed with “Not a single supervisor and/or sbm…not guilty of that transgression…”

      You mean, serving the public and running for election….? Giving 10-40 hours a week for no pay, no thanks and no relief? I guess it’s purely coincidental that every school district in the state is in economic difficulty — they must all have taken TE’s lead….

      “It’s the economy, stupid.”
      The phrase, made popular by Clinton campaign strategist James Carville, refers to the notion that Clinton was a better choice because Bush had not adequately addressed the economy, which had recently undergone a recession.

      You Remember Bush –
      “Read my lips: No New Taxes.”

    3. John- I understand that you might not agree with Tom Colman politically. However, it seems mean spirited to attack someone who has dedicated so many hours of service to the school district. Tom doesn’t just talk about budget problems, he actively volunteers many hours of his time and has done so for years. Beyond his service on the Operations and Operations Committee and the BAWG, he was one of the founders of FLITE and has put countless hours into the school district.

      You attack Tom based on Dr. Waters compensation. Have you ever talked to Tom about it? Do you actually know what he said to the school board on this subject?

      Similarly you attack Tom because of redundant mailings. Perhaps you could check how many of these mailings are required by ridiculous state mandates first.

      Let’s just try to all be civil to one another here. Anyone can volunteer their services to the school district. If you don’t like Tom Colman’s perspective, you can volunteer yourself. But Tom is one of the few people who has stepped up consistently to help the schools thru his volunteer work and thru FLITE. We might disagree with one another, but let’s try to respect one another at least.

  25. I’m sure I read it here though I apologize that I don’t know how posted it, but it made some sense to me.

    If 10% or so of your home value is directly influenced by the quality (perceived or otherwise?) of the school district, then aren’t your school taxes in some way “insurance” to protect that premium? Is the $200 difference between the amount under Act 1 vs. the amount with exceptions something every family / homeowner in the community should be willing to pay to prevent the erosion of the reputation? talk to a realtor. Ask them where any demand for this community comes from? It comes from the reputation of the schools.
    So the existing contract is moot. Fund the program and going forward, figure out a new approach to paying staff. Apparently there are ways to cut teachers under the guise of unnecessary programs. After the elementary language program, though, what other programs are unnecessary? Sports, Arts, Music, Technology, TV etc? I think those programs directly contribute to the reputation.

    1. Where is it writ that the alternative to taxing beyond the Act 1 cap in 2011/12 is reduced school quality? There is plenty of tax-payer money put by in the General Fund to meet current year obligations.

      And it seems to me that the type of parents that have the type of students that create T/E’s quality are going to appreciate and value a school system where the focus is explicitly on both outcomes and expenditures.

      I think that the taxpayers deserve to continue with a thorough examination of the revenue, program and overhead options before being asked for yet another increase far beyond that of general incomes and prices.

      1. Ray — Ditto to what you said above. Lower taxes do not have to mean that we reduce school quality. Your comments always make a lot of sense. Maybe you should run for school board?

        Pattye- you should twist Ray’s arm to persuade him.

  26. Where is it written that taxing beyond the Act 1 cap is “far beyond that of general incomes and prices.” That plenty of money can certainly be tapped — but it is like borrowing money from your 401K to pay for your electric bills. It’s a desperate move….one that should only happen in dire circumstances, because you use electricity in the act of living…it’s not a special purchase.

    I understand the issue — and I know how divisive the solution is. But can’t we do it in smaller steps — reducing like last year and moving toward the contract where yes — they put the hammer down. The contract MUST provide benefits in a defined contribution, NOT a defined benefit. The taxpayer has to have their exposure to the increased cost of health care limited. That and a 7 period day, teachers teaching 6 periods, and an activity fee are steps that won’t cost us double (last year the $300K one time savings now is part of the gap in funding this year – x 2!)

    It has been demonstrated previously that the taxes in TESD and Tredyffrin are far below the neighboring communities. Likewise the property values here are more expensive than most neighboring communities. So on the 1% of your property value, the decision whether to tax 1.4% vs. 4.2% as an increase — knowing that is does not come close to funding the gap — is hardly a wreckless expenditure. Using the fund balance is fine — it’s the same as the state reducing the PSERS contribution level resulting in a spike over the next few years. If you spend fund balance for recurring expenses, you are simply deferring the pain, and compounding it.

    I have no doubt that in the end the board will fudge the difference between the exceptions and the Act 1 limit — compromise after all means no one gets what they need…but everyone feels touchy feely good about it.

    But given the fact that you cannot reduce the costs of our educational program except through attrition. I agree with anon above — the tax increase is insurance against declining interest in the TE schools by prospective buyers.

    And no — I’m not sayiing reality is that less money means a poor program, but I am saying that since the admin has said that certain of their initiatives WILL affect the program quality, we jeopardize the reputation by inference, and subsequently perception — which for most people is reality.

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